Boeing will reportedly blow through billions more dollars than expected to course correct after a series of financial hits. The company said that its bottom line is hurting as the company navigates an ongoing crisis related to the safety of its planes and its ability to manufacture them. On Thursday, May 23, Boeing announced that it took a nearly $4 billion hit during Q2 of 2024.
Additionally, the company warned investors it may take a similar or larger hit next quarter. Boeing’s stock fell more than 7% upon the announcement on Thursday.
The company said that slowing production and supply chain issues are to blame for its financial struggles. Production of the 737 Max Jets is sluggish after an Alaska Airlines flight’s emergency door ripped off of the plane mid-flight. Boeing said it will not meet its goal of 38 jets a month.
Boeing delivered 67 planes in the first three months of this year, and it is on track for the same number of planes heading into the next three months.
Some unrelated issues slowed production as well. For instance, the company disclosed that some of its employees may have skipped some inspections on 787 Dreamliners and falsified inspection records. Meanwhile, Boeing has not produced a Dreamliner this month.
To mitigate its financial woes, Boeing tapped into debt markets. Boeing hopes the move will raise $10 billion as investors remain concerned about the company’s financial future.
The latest black eye for the company may be a report released on Wednesday, May 22, that revealed crews found a potentially catastrophic flaw in a fleet of Boeing 777 planes earlier this year. A report to the Federal Aviation Administration from Boeing said that poor electrical insulation around its fuel tank could reportedly lead to a fire on the aircraft. The issue could impact nearly 300 planes.
After Boeing reported the flaw to federal regulators, the FAA offered a $14 million proposal to fix the issues. The cost would fall on operators and airlines that own the jets, not Boeing. Boeing stated that it is aware of the FAA’s proposal and issued guidance to 777 operators. The company said that it “fully” supports the FAA’s recommendation, adding that its 777 fleet has operated for nearly three decades, safely flying “more than 3.9 billion passengers.
